Animalcare returns to revenue growth with higher margins and cash conversion in FY23
() , a supplier of pharmaceutical products and services to the veterinary industry, announced preliminary results for the year ended December 31, 2023 (FY23).
Animalcare reported a 3.8% revenue increase to £74.4m, reflecting improved performance in H2. Gross margins improved by 1.5% to 58.3% and underlying EBITDA grew by 1.5% to £13.3m. Profit before tax was £3.5m, up from £2.5m a year ago, and underlying EPS was 10.9p, reflecting an increase in the underlying tax rate.
Net debt reduced significantly to £1.2m at year-end from £5.4m a year ago, benefiting from improved cash conversion. proposed an increased final dividend of 3p/share, giving it a full-year dividend of 5p, up from 4.4p in FY22. Following the post-period disposal of Identicare, had a net cash position of £27.0m on February 28, 2024.
Operationally, Animalcare reported positive sales momentum for its Plaqtiv+ dental range, and double-digit growth for Daxocox across its direct sales markets. The return of Danilon to the group's sales and marketing control also contributed to higher revenues.
View from Vox
Strong performance from Animalcare in FY23, with a return to revenue growth across all 3 product categories, improved gross margins, and a robust cash position. Top-line growth was driven by the recently launched Plaqtiv+ range, the return of equine anti-infective Danilon to the group's sales, and marketing control. Additionally, an improved cash conversion rate of 86% (77% LY) and the disposal of 's majority stake in Identicare for £24.9m in cash, resulted in a significantly strengthened cash balance, positioning company well for further growth. Overall, results were in line with market expectations.
The improvement in gross margins was supported by 's ongoing focus on larger-selling, more profitable brands and effect of targeted pricing measures to offset the impact of inflation. Ongoing product development should help cash generation further, including an early-stage VHH antibody collaboration and licensing programme with Orthros Medical. Animal health markets continue to show resilience, supporting a positive growth outlook for .
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